from the violating-obscure-statutes?-that's-a-paddlin' dept

Update: Of course, just about the time we posted this, the news came out that Gibson has decided to settle, though it still mainstains it did nothing wrong. It got off by having to pay $350,000 and by forfeiting the confiscated wood, which it notes is much less onerous than fighting this through. So this story is now done, but the original post below still highlights the ridiculous situations that Gibson was put in, and which many others could easily end up in.

It's been close to a year since the Justice Department raided Gibson Guitars for using "illegal wood" on the fingerboards. You'd think something like "illegal wood" wouldn't require the use of the term "raid," or the services of 30 agents with guns and bulletproof vests, but hey, welcome to America. The raid was authorized under the Lacey Act, an act whose original use was to curb poaching of illegal species, but soon spread (as these things do) to cover the importing other wildlife and plants.

The fun thing about the law is that staying in compliance requires knowing not only the particular details of over 200 other countries' laws, but also a bit of mind-reading in order to suss out how the federal government will interpret each one of these laws. Put it all together and you've got Gibson's situation, which is detailed in a post for the Wall Street Journal (gated) but also helpfully detailed at Cato's new National Police Misconduct Reporting Project. The first indication that this raid was a complete abortion of justice is the fact that the wood Gibson used had made it into the country without being seized:

The fingerboards of our guitars are made with wood that is imported from India. The wood seized during the Aug. 24 raid, however, was from a Forest Stewardship Council-certified supplier, meaning the wood complies with FSC's rules requiring that it be harvested legally and in compliance with traditional and civil rights, among other protections. Indian authorities have provided sworn statements approving the shipment, and U.S. Custom allowed the shipment to pass through America's border and to our factories.

Having made it through the safeguards that were set up to stop illegal imports, one would think that the material was cleared for use. But this sort of clear thinking fails to take into account that every law is somehow still open to multiple interpretations:

Nonetheless, the U.S. Fish and Wildlife Service decided to enforce its own interpretation of Indian law, arguing that because the fingerboards weren't finished in India, they were illegal exports. In effect, the agency is arguing that to be in compliance with the law, Gibson must outsource the jobs of finishing craftsmen in Tennessee.

Seizure laws are incredibly popular with everyone from large government agencies to small town police departments and having 4,000 federal criminal offenses on the books makes it very simple for law enforcers to find inadvertent or unwitting criminals and inflict damage on them through seizures and imprisonment. Any avenue that looks as if it may provide agencies like this with more power and control is generally explored to its fullest.

This is an overreach of government authority and indicative of the kinds of burdens the federal government routinely imposes on growing businesses. It also highlights a dangerous trend: an attempt to punish even paperwork errors with criminal charges and to regulate business activities through criminal law. Policy wonks call this “overcriminalization.” I call it a job killer.

Many business owners have inadvertently broken obscure and highly technical foreign laws, landing them in prison for things like importing lobster tails in plastic rather than cardboard packaging (the violation of that Honduran law earned one man an eight-year prison sentence). Cases like this make it clear that the justice system has strayed from its constitutional purpose like stopping the real bad guys from bringing harm.

That is exactly where the system is now. Criminal intent is no longer factored in to the equation. The old chestnut, "Ignorance of the law is no excuse," is actually a completely valid excuse. 4,000 federal criminal offenses on the books means that heavier sentences and fines are levied against criminals who in the past would have been subject to less harsh civil and/or local judgments. Add to that 40,000 new state laws introduced in 2012 alone, and you've got the perfect recipe for government overreach and thousands of chances to be hauled into court to attempt to prove a negative.

The sheer volume of modern law makes it impossible for an ordinary American household to stay informed. And yet, prosecutors vigorously defend the old legal maxim that "ignorance of the law is no excuse." That maxim may have been appropriate for a society that simply criminalized inherently evil conduct, such as murder, rape, and theft, but it is wholly inappropriate in a labyrinthine regulatory regime that criminalizes activities that are morally neutral. As Professor Henry M. Hart opined, "In no respect is contemporary law subject to greater reproach than for its obtuseness to this fact."

It is absurd and unjust for the government to impose a legal duty on every citizen to "know" all of the mind-boggling rules and regulations that have been promulgated over the years. Policymakers can and should discard the "ignorance-is-no-excuse" maxim by enacting a law that would require prosecutors to prove that regulatory violations are "willful" or, in the alternative, that would permit a good-faith belief in the legality of one's conduct to be pleaded and proved as a defense. The former rule is already in place for our complicated tax laws — but it should also shield unwary Americans from all of the laws and regulations as well.

Gibson Guitars had every reason to presume the wood it was using was perfectly legal. The company had taken great care to stay within the confines of the laws as it understood them. Instead of being given the benefit of a doubt when the issue of legality arose (and after the wood had already cleared Customs), the company was raided as though it were cranking out black market explosives rather than ordinary, harmless guitars. Gibson always has the option to sue but the odds of getting this case to be heard, much less winning it, are low. Even with higher odds, the time and expense would far outweigh the losses sustained by Gibson at the hand of the federal government.

This leaves companies like Gibson in the unenviable position of putting even more time and money into compliance, rather than innovation, expansion or outside investments. In today's economy, the private sector really can't afford another "job killer," especially one they have to pay for out of their own pockets.

The raids forced Gibson to cease manufacturing operations and send workers home for the day while armed agents executed the search warrants. “Agents seized wood that was Forest Stewardship Council controlled,” Juszkiewicz said. “Gibson has a long history of supporting sustainable and responsible sources of wood and has worked diligently with entities such as the Rainforest Alliance and Greenpeace to secure FSC-certified supplies. The wood seized on August 24 satisfied FSC standards.”

Juszkiewicz believes that the Justice Department is bullying Gibson without filing charges.

“The Federal Department of Justice in Washington, D.C. has suggested that the use of wood from India that is not finished by Indian workers is illegal, not because of U.S. law, but because it is the Justice Department’s interpretation of a law in India. (If the same wood from the same tree was finished by Indian workers, the material would be legal.) This action was taken without the support and consent of the government in India.”

Now, remember, we noted in the earlier story that a similar raid a few years ago resulted in the feds filing charges against the wood specifically -- and not the company: United States of America v. Ebony Wood in Various Forms. If this all sounds familiar, it's quite similar to what we've seen with the feds seizing domain names. These involve "in rem" claims against property, as opposed to "in personam" claims against people or organizations. We've long been troubled by general seizure and forfeiture law in the US, which basically seems like a license for the US government to, at best, bully and at worst, steal from, anyone they don't like. So just as the US government is now claiming that it's not charging Puerto 80 with anything as it tries to keep its domains, the same thing appears to be happening here. The feds never actually accuse Gibson of violating any laws. They just say the wood is illegal and seize it.

Under seizure laws, no actual lawsuit ever needs to be filed. They can just seize, and later file for forfeiture, in which the government gets to keep what it seized. So they never actually file charges against the company, but just get to keep whatever was seized, claiming that the property itself is illegal or was used for illegal purposes. It's an amazingly Kafka-esque situation for those whose property was seized, and seems ripe for abuse. And, not surprisingly, there's a ton of evidence that law enforcement regularly abuses seizure and forfeiture laws.

Hopefully Gibson will continue to fight this, and draw some more attention to a system that really should be changed. I can understand seizure for the sake of holding onto evidence in an actual criminal trial. But outside of that, it seems difficult to justify the ability of the government to seize property and then claim it just gets to keep it, without filing any actual charges.

from the norwegian-wood dept

Last week, the feds apparently raided the premises of Gibson Guitar, searching for "illegal wood" used in those guitars. Apparently, the government and Gibson have been involved in an ongoing lawsuit for some time, after the feds seized some guitars in 2009 and a case commenced against the wood in the guitar (yes, against the wood, since it was one of those "in rem" cases): "United States of America v. Ebony Wood in Various Forms." Apparently, now the government is taking it up a notch, and while there is a grandfather clause, if you get your paperwork just marginally wrong and happen to own a Gibson guitar with illegal wood, the government could seize it and fine you. Apparently, a bunch of musicians are reasonably afraid, and some suggest not taking any such guitar out of the country if you ever plan on bringing it back:

John Thomas, a law professor at Quinnipiac University and a blues and ragtime guitarist, says "there's a lot of anxiety, and it's well justified." Once upon a time, he would have taken one of his vintage guitars on his travels. Now, "I don't go out of the country with a wooden guitar."

[....]

It's not enough to know that the body of your old guitar is made of spruce and maple: What's the bridge made of? If it's ebony, do you have the paperwork to show when and where that wood was harvested and when and where it was made into a bridge? Is the nut holding the strings at the guitar's headstock bone, or could it be ivory? "Even if you have no knowledge—despite Herculean efforts to obtain it—that some piece of your guitar, no matter how small, was obtained illegally, you lose your guitar forever," Prof. Thomas has written. "Oh, and you'll be fined $250 for that false (or missing) information in your Lacey Act Import Declaration."

And since this is a "strict liability" situation, asking the government for help in making sure you're being legal may actually make things worse. Much worse:

Consider the recent experience of Pascal Vieillard, whose Atlanta-area company, A-440 Pianos, imported several antique Bösendorfers. Mr. Vieillard asked officials at the Convention on International Trade in Endangered Species how to fill out the correct paperwork—which simply encouraged them to alert U.S. Customs to give his shipment added scrutiny.

There was never any question that the instruments were old enough to have grandfathered ivory keys. But Mr. Vieillard didn't have his paperwork straight when two-dozen federal agents came calling.

Facing criminal charges that might have put him in prison for years, Mr. Vieillard pleaded guilty to a misdemeanor count of violating the Lacey Act, and was handed a $17,500 fine and three years probation.

I'm all for not destroying the environment -- and if Gibson is really doing something bad, then that should be dealt with. But some of these other situations just seem flat out ridiculous. Don't the feds have more important things to do?